Cryptocurrencies are generally taxed in two ways: capital gains and income. Capital gains and losses result from disposing of your crypto (selling, exchanging for another crypto, or making a purchase) and are reported on Form 8949 on your tax return. Other forms of crypto income (airdrops, mining income, staking or interest income, etc.) are typically reported on Schedule 1 as "Other income". This assumes you aren't in a business or trade related to your crypto activity - that activity gets reported on Schedule C.
Here at CoinLedger, we allow you to review your Taxable Income summary in the app and we provide you with a downloadable Income Report which contains more detail about all of your crypto income throughout the year. Below, we'll review how to locate your Taxable Income summary for the year while using the software, as well as an explanation of the Income Report and the information it provides.
Reviewing your 'Taxable Income' summary
First, you can locate your total crypto income for the year from Step 4 Tax Reports in our app. In most cases, you simply need to record the totals that you see under the Taxable Income display on Step 4, and then enter those amounts into your tax filing software either as "other income," or on Schedule 1 of your tax return, as shown in the example below.
Taxpayers have the option to combine their crypto income together and report on Schedule 1, or list out each of their income categories by type to report on Schedule 1. The correct answer to this question varies for each individual; if there are material amounts of income from different categories, it may make more sense to separate them out by type on your return.
NOTE: This is not actual tax advice on which tax form you should use to report your interest income or any other type of crypto income. If you are at all unsure about how to complete these forms, it's recommended that you consult with a tax professional. Here is a directory we have listed on our website if you're interested in talking to a crypto tax pro.
What's in the 'Income Report'?
If you received crypto income this year - which includes crypto acquired from staking, mining, interest, airdrop rewards, and forks, to name a few- then you have the ability to download the Income Report from our website. The Income Report is not an official filing document. It is a supplementary file that provides more details about your total crypto income calculations. You can save this file for your records or send it to your tax professional for their review.
Income Report explained
The Income Report details the date, amount, fair market value, and income type for each crypto asset you received as income in a given year.
The Timestamp column displays the date the asset was acquired according to the timezone applied to your reports. You can adjust your timezone under your Account Settings.
The Fair Market Value column displays the USD value of the asset at the time it was received. This is the amount that you report as crypto income.
The Price At Acquisition column shows the price per share at the time you received the asset - you do not need to report this amount.
This information can be used to fill out forms such as Schedule 1, Schedule B, and Schedule C on your taxes, and can easily be downloaded on our Tax Reports page.
NOTE: While we're glad to answer any questions you have regarding our product or how to import crypto income into our software, CoinLedger cannot provide tax advice for its users. For questions on which forms to use to report your crypto income, please see a qualified tax professional.